Yen rises to 159 per dollar as markets price an 80% chance of a Bank of Japan hike
Updated August 26, 2026.
VERIFIED USD/JPY trades at 159.01 yen per dollar on August 26, 2026, down 0.12% from the previous session, according to Trading Economics. Over the past month the yen has strengthened 2.90%, but it remains 7.92% weaker than a year ago. Japan's interest rate stands at 1.00% (July 2026) versus the Federal Reserve's 3.75%.
What is behind the move
HYPOTHESIS Markets are currently pricing an approximately 80% probability that the Bank of Japan will raise rates by 25 basis points, to 1.25%, at its September meeting — sharply up from about 23% before the July meeting. Former Bank of Japan board member Seiji Adachi said he sees that hike as likely, and another one as early as January, warning that holding rates could reignite a yen selloff and accelerate import-driven inflation. This is the reading circulating this week, not a fact independently verified by this site, per Trading Economics.
HYPOTHESIS The August 26 session is also explained, per the same source, by falling oil prices on hopes of renewed Middle East diplomacy, which eased near-term inflation concerns, and by dollar weakness ahead of a key US inflation reading and the Federal Reserve chair's speech later this week. Bank of Japan Governor Kazuo Ueda will not attend the Jackson Hole symposium due to a scheduling conflict.
What this does not mean
HYPOTHESIS The yen's 2.90% strengthening over the past month does not undo its 7.92% decline over the past twelve: it is a correction inside a longer weakening trend, not a return to where it stood a year ago. And the 80% probability markets are pricing is just that — a probability implied by today's prices. The Bank of Japan has not made any decision yet, and its September meeting could surprise in either direction.
Sources consulted on August 26, 2026: Trading Economics: Japanese Yen, quote and stats, Trading Economics: Japanese Yen Rises as Oil Prices Decline.
Educational notice: this article is analysis based on public data, may be wrong, and is not financial advice. It is not a buy or sell recommendation. The decision and the risk are always the reader's own.